Diamond Offshore fleet status overshadows earnings beat


Diamond Offshore (DO -5.9%) is sharply lower despite reporting better than expected Q2 earnings and revenues, as shares appear to be reacting more to the fleet status report that was released last night.

DO's newbuild Ocean BlackRhino secured a contract, but only because it will take over the contract the Ocean Confidence was set to begin in April 2015, suggesting the BlackRhino could not secure its own contract in its delivery window; the customer has the option to extend the original $550K/day contract to a three-year contract at a $485K dayrate, a step down from recent three-year contracts in the $550K-$600K range - which Cowen analysts say is a reminder that the trend in ultra-deepwater dayrates remains firmly down.

Other offshore drillers also are lower: SDRL -1.2%, RIG -2%, NE -1.9%, ESV -1.8%, ATW -1.6%, HERO -2.2%, RDC -0.8%.

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Comments (1)
  • Rappenco
    , contributor
    Comments (695) | Send Message
     
    Simple supply and demand will dictate these day rates going forward.
    The UDW field is very crowded and that includes new state of the art units.
    29 Jul 2014, 10:19 AM Reply Like
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